The Committee on Foreign Investment in the United States (CFIUS), a U.S. government interagency committee that conducts national security reviews of foreign investments, recently released its 2018 annual report. The report takes into account cases reviewed by CFIUS both before and after the August 2018 enactment of the Foreign Investment Risk Review Modernization Act (FIRRMA), which expanded CFIUS’ jurisdiction and enabled CFIUS to implement a pilot program that mandated filings for certain transactions involving critical technologies. The annual report confirms that, in 2018, China topped all foreign investors for the seventh year in a row, and describes CFIUS’ review of the first declarations submitted under the CFIUS pilot program.

Proposed Rule Would Alter Mandatory Filing Requirements

On 21 May 2020, CFIUS also published a proposed rule (the Proposed Rule) in the Federal Register that, among other things, would alter the requirements for the critical technologies mandatory filing program implemented on February 13, 2020 (essentially the successor to the pilot program). The Proposed Rule seeks public comment within 30 days of its publication. The Proposed Rule would replace the “industry” criterion of the critical technologies mandatory filing program with a criterion related to whether certain U.S. government authorizations would be required to export, re-export, transfer (in country), or retransfer the “critical technology” that the U.S. business produces, designs, tests, manufactures, fabricates, or develops to certain transaction parties and foreign persons in the ownership chain.

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We will continue to monitor this space for further developments. For further information or assistance regarding transactions potentially subject to CFIUS’ jurisdiction, please do not hesitate to contact any of the authors.

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